Uniform price auction/commodity auction

This is a type of auction in which a fixed number of identical items are sold for an identical price. Bidders place a bid for the quantity they want, indicating what price they are willing to pay for each unit. These bids are concealed from other bidders. Once the auction has ended, the auctioneer assesses the bids made, and decides at which price the total quantity of units on offer should be sold.

The highest bid is the first considered and then each progressively lower bid is considered until the auctioneer decides on an appropriate price. The price that is decided is the ‘uniform price’ at which all units will be sold. Participants who made a bid of the uniform price or above are the winning bidders of the auction.